We estimate that our net proceeds from the sale of the common stock that we are
offering will be $51.4 million, assuming an initial public offering price of
$8.00 per share after deducting estimated underwriting discounts and
commissions and estimated offering expenses payable by us. If the underwriters’
option to purchase additional shares from us is exercised in full, we estimate
that our net proceeds would be approximately $59.8 million after deducting
estimated underwriting discounts and commission and estimated offering expenses
payable by us. A $1.00 increase (decrease) in the assumed initial public
offering price of $8.00 per share would increase (decrease) the net proceeds to
us from this offering by $7.0 million, assuming the number of shares offered by
us, as set forth on the cover page of this prospectus, remains the same. We may
also increase or decrease the number of shares we are offering. Each increase
(decrease) of 1,000,000 shares in the number of shares offered by us would
increase (decrease) the net proceeds to us from this offering by approximately
$7.4 million, assuming that the assumed initial public offering price remains
the same, and after deducting the estimated underwriting discounts and
commissions and estimated offering expenses payable by us. We do not expect
that a change in the offering price or the number of shares by these amounts
would have a material effect on our uses of the net proceeds from this
offering, although it may impact when we may need to seek additional capital.
We intend to use approximately $8.6 million of our net proceeds from this
offering to pay the principal and accrued interest amounts outstanding under
the following bank loans:
• A loan and security agreement with Comerica Bank, which provides a
revolving line of credit based on our outstanding accounts receivables.
The line of credit carries an interest rate of 0.75% per annum over the
lender’s prime rate; provided that such prime rate shall not be less
than the daily adjusted LIBOR rate plus 2.5% per annum. As of December
31, 2011, the interest rate in effect is 4.0%. The revolving loans may
be borrowed, repaid and reborrowed until November 4, 2013, at which time
all amounts borrowed under the loan agreement must be repaid. The loan
agreement is subject to an annual nonrefundable fee of $10,000 due in
July of each year until the facility is terminated. The principal amount
outstanding under this loan and security agreement was $5.0 million as
of December 31, 2011.
• A term loan agreement with Korea Development Bank, which carries a fixed
interest rate of 8.4% per annum and has a maturity date of April 30,
2012. As of December 31, 2011, the outstanding principal and accrued
interest is $3.5 million.
• A loan facility with Industrial Bank of Korea, which carries a monthly
variable interest rate based on Public Capital Management Fund lending
rate in Korea less 0.5%, which was 2.4% as of December 31, 2011. The
maturity date of this loan is March 15, 2012. As of December 31, 2011,
the outstanding principal and accrued interest is $0.1 million.
We intend to use the remaining net proceeds from this offering for working
capital and other general corporate purposes, which may include funding
research and development of new products and technologies, expansion of our
sales and marketing efforts, general and administrative expenditures and other
capital expenditures to support our operations. We may also use a portion of
the net proceeds of this offering to expand our current business through
acquisitions of, or investments in, other complementary businesses, products,
intellectual property or technologies. However, we have no agreements or
commitments with respect to any such acquisitions at this time.
Pending the uses described above, we intend to invest the net proceeds in a
variety of capital preservation instruments, including short-term, interest-
bearing, investment grade instruments, certificates of deposit or direct or
guaranteed obligations of the U.S. government.
The expected use of the net proceeds of this offering represents our current
intentions based upon our present plans and business conditions, and our
management will have broad discretion in using the net proceeds from this
offering.

Competition in the wireless semiconductor business continues to increase at a
rapid pace as consumers, businesses and governments realize the market
potential of wireless products and services. To remain competitive, companies
must employ highly trained engineering talent and make significant investment
over long development cycles.
In the LTE market, we compete or expect to compete with semiconductor companies
such as Broadcom Marvell Technology Group Ltd. Corporation, Intel Corporation,
Qualcomm Inc., Samsung Electronics Co., Ltd., ST-Ericsson N.V. and potentially
other companies focused on developing LTE SoCs. In the WiMAX market, we
compete, or expect to compete with semiconductor companies such as Broadcom
Corporation, which acquired Beceem Communications Inc., Intel Corporation,
MediaTek Inc., Samsung Electronics Co., Ltd, Sequans, Inc. and potentially
other competitors that offer WiMAX SoCs.
Many of our competitors have longer operating histories and customer
relationships, significant legacy products and technology, greater resources
and brand recognition, more industry influence and a larger customer base. They
may be able to dedicate larger resources to promote their products, provide
backward compatibility with integrated solutions and adopt aggressive pricing
policies that threaten our performance and cost advantages.
While size and scale can be an advantage, we believe we can compete effectively
on the following dimensions:
• Smaller form factor, lower bill-of-material cost and lower power
consumption, resulting from the high-level integration incorporated in
our single-chip products that include RF, baseband modem and DSP;
• Superior wireless SoC performance, as measured by higher network
throughput, enhanced signal reach and lower power consumption;
• Advanced product features such as LTE/WLAN or WiMAX/WLAN dual-mode with
additional processing power to support VoIP;
• Interoperability with most major base stations and extensive field
trials with top-tier operators;
• Comprehensive customer support from designer-friendly reference designs
and experienced field application engineering resources; and
• Track record of commercializing our solutions.

Company Description

We are a leading fabless designer and supplier of advanced 4G mobile
semiconductor solutions. Our products are system-on-a-chip (SoC) solutions that
integrate radio frequency (RF), baseband modem and digital signal processing
(DSP) functions onto a single die for the 4G Long-Term Evolution (LTE)

and
Worldwide Interoperability for Microwave Access (WiMAX) markets. We were the
first to commercialize single-chip solutions for LTE and WiMAX and believe we
are currently the only company selling commercialized single-chip LTE
solutions. We believe our proprietary technology and system-level expertise
enable us to provide complete 4G platform solutions, which are differentiated
by their small form factors, low power consumption, high performance, high
reliability and cost effectiveness. Our solutions have been designed into
smartphones, USB dongles, wireless routers, customer premise equipment (CPE),
femto access points, public safety devices and embedded modules for notebook
and tablet devices.
Our core differentiation results from our distinctive RF complementary metal
oxide semiconductor (CMOS) capabilities combined with our ability to integrate
multiple functions, including RF, wireless modem and DSP, onto a single die. We
have also developed multiple orthogonal frequency-division multiple access
(OFDMA) modem and multiple-input multiple-output (MIMO) antenna capabilities,
two technologies that are critical for delivering LTE and WiMAX solutions and
for integrated wireless local area network (WLAN) functionality.
We work closely with wireless operators to create customer demand and drive
adoption of our solutions by collaborating with them on the designs of our
products. These operators include AT&T, MetroPCS Wireless, Inc. (Metro PCS),
Verizon Wireless (Verizon), Vodafone Limited (Vodafone) and Yota for LTE and
Clearwire Corporation (Clearwire), KT Corp., SK Telecom Co. Ltd., Sprint Nextel
Corp. (Sprint), UQ Communications, Inc., Yota, YTL Communications Sdn Bhd (YTL)
for WiMAX. Our primary customers are device original equipment manufacturers
(OEMs) and original design manufacturers (ODMs). During the fiscal year ended
June 30, 2011, our customers included Infomark Co. Ltd., Inkel Corporation
Ltd., Interbro Inc., Kyocera Corporation, LG Electronics, Inc. (LG), LG Innotek
Co. Ltd, Modacom Co. Ltd., Quanta Computer, Inc., Seowon Intech Co. Ltd. and
YTL.
We depend on a small number of customers and distributors for a large
percentage of our annual revenue. During the year ended June 30, 2011 and the
six months ended December 31, 2011, sales to LG accounted for 48% and 14% of
our total revenue, respectively. Sales to our five largest OEM/ODM end
customers (including direct sales and indirect sales through distributors)
accounted for approximately 87% and 82% of our total revenue during the year
ended June 30, 2011 and the six months ended December 31, 2011, respectively.
Sales through our distributor, Daejin Semiconductor Co., Ltd., accounted for
approximately 19% of our total revenue during the year ended June 30, 2011.
Apache Communication, Inc., China Electronic Appliance Shenzhen Co., Ltd. and
Daejin Semiconductor Co., Ltd. accounted for approximately 24%, 19% and 16% of
our total revenue for the six months ended December 31, 2011, respectively.
As of December 31, 2011, we have shipped approximately 1.8 million LTE
semiconductors in support of the initial LTE deployments by AT&T, Metro PCS,
Verizon, Vodafone and Yota and approximately 5.4 million WiMAX semiconductors
supporting many major WiMAX operators globally. Our revenue was $22.4 million,
$33.1 million, $68.6 million for the fiscal years ended June 30, 2009, 2010,
2011, respectively, and $44.9 million for the six months ended December 31,
2011. Our revenue attributed to LTE products was $0, $0.9 million, $35.2
million for fiscal years ended June 30, 2009, 2010, 2011, respectively, and
$26.0 million for the six months ended December 31, 2011; our revenue
attributed to WiMAX products was $16.7 million, $25.5 million, $30.2 million
for fiscal years ended June 30, 2009, 2010, 2011, respectively, and $14.5
million for the six months ended December 31, 2011; and our revenue attributed
to RF and other products was $5.7 million, $6.7 million, $3.3 million for
fiscal years ended June 30, 2009, 2010, 2011, respectively, and $4.4 million
for the six months ended December 31, 2011. Our net loss was $14.5 million,
$19.9 million and $11.5 million for fiscal years ended June 30, 2009, 2010 and
2011, respectively. Our net income was $4.5 million for the six months ended
December 31, 2011. We commenced operations in 1998 and have incurred losses on
an annual basis since inception. As of December 31, 2011, our accumulated
deficit was $188.4 million.
-----
We were incorporated in California in June 1998 as Global Communication
Technology, Inc. and reincorporated in Delaware in February 2001. Our principal
executive offices are located at 2121 Ringwood Avenue, San Jose, California
95131, and our telephone number is (408) 434-6040. Our website address is
www.gctsemi.com.

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